(Alliance News) - The FTSE 100 limped to the finish line Friday with sterling continuing to hold back the blue chip index and disappointing jobs data in the US unable to inspire.
The FTSE 100 index lost 14.39 points, or 0.2%, to finish at 6,489.33 - but managed to end the week 1.4% higher.
The mid-cap FTSE 250 index closed up 257.57 points, or 1.2%, at 21,066.87, finishing the week 4.2% higher. The AIM All-Share index closed up 7.51 points, or 0.6%, at 1,211.58.
The Cboe UK 100 index closed down 0.2% at 645.41. The Cboe 250 ended up 0.9% at 18,487.70 and the Cboe Small Companies advanced 0.8% to 12,465.79.
In mainland Europe, the CAC 40 in Paris gained 0.8% while the DAX 30 in Frankfurt ended marginally lower.
In the FTSE 100, UK high-street banks were once again among the best performers. The Bank of England told financial services firms on Thursday to brace for negative interest rates, giving domestic lenders six months to prepare, but also said such a move isn't imminent.
Shares in Lloyds, NatWest and Barclays gained 2.5%, 4.0% and 1.0% respectively.
BoE Governor Andrew Bailey said on Thursday that the UK''s economic performance compared with other countries during the Covid-19 pandemic was not as bad as it seemed and talked up the country's economic prospects as the mass vaccination programme continues.
The comments continued to give sterling a boost, quoted at USD1.3728 Friday's close, up from USD1.3659 at the London equities close Thursday.
IG Chief Market Analyst Chris Beauchamp said: "The stronger pound continues to hobble the FTSE 100, which has lagged behind other indices this week in the rebound from last week's lows. While the dollar has eased off a touch today the strength in the greenback continues to hurt commodity prices, putting pressure on the index's heavyweight mining sector."
Brent oil was quoted at USD59.62 a barrel at the London close, up from USD58.55 at the close Thursday.
Gold was quoted at USD1,808.40 an ounce at the London equities close, higher against USD1,788.70 late Thursday.
"While this has been offset to a degree by strength in Shell thanks to the ongoing rally in oil, once again the lack of big tech names in the index appears to have been its undoing. However if today's dollar weakness has further to go, the outlook may well improve, helping the FTSE to recover more of its recent lost ground," Beauchamp added.
Shell 'A' shares gained 2.8%, while the 'B' shares added 2.7%.
At the other end of the large caps, Johnson Matthey lost 4.2%, after Barclays downgraded the speciality chemicals company to Underweight from Equal Weight.
In the midcaps, Beazley was the standout performer, up 15%, despite the insurer swinging to an annual loss and skipped paying any dividend for 2020.
Beazley posted a pretax loss of USD50.4 million for the year ended December 31, swinging from a USD267.7 million profit in 2019 on revenue of USD2.91 billion, up 10% from USD2.34 billion. However, the loss was half of market forecasts for a USD106.4 million loss.
"Given the underperformance of the shares year-to-date, we expect that the surplus capital ratio of 23% will be in focus," analysts at Jefferies said.
CMC Markets analyst David Madden added: "As bad as the headline results were, investors are looking ahead to the rest of the year and they are taking the view that 2020 was unique. Vaccinations are being rolled out and a company like Beazley stands to benefit a lot from a return to some form of pre-pandemic life. Beazley's optimistic outlook has overshadowed the poor results from 2020."
Shares in Aggreko shot up after it confirmed it is in discussions with a consortium made up of UK-based private equity firm TDR Capital, plus infrastructure investment manager I Squared Capital US and its affiliates, over an 880 pence per share takeover offer.
The proposal represents a 39% premium to the power generator rental firm's Thursday closing price of 635.00p each. Shares in FTSE 250-listed Aggreko closed 33% higher at 844.00 pence.
In the US, Wall Street was in the green at the London equities close. The DJIA was 0.4% higher, while both the S&P 500 index and the Nasdaq Composite were up 0.3%.
The US labour market took further steps to a recovery in January as Covid-19 restrictions on businesses started to ease, the latest figures from the Department of Labor showed.
The US economy added back 49,000 jobs in January, improving from December which saw a reversal of 227,00 jobs.
IG's Beauchamp said: "Today's US jobs report generated little in significant market reaction, but overall it looks like we have another one of those 'Goldilocks' reports that please everyone. While only 49,000 jobs were added in January, at least things are moving in the right direction, and the more apocalyptic predictions seen before the release have been proven wrong. Crucially however, things are improving, but only at a modest pace.
"Thus there has been no sense in markets that today's report lessens the need for stimulus, and in size, and quickly, which helps to account for the more positive tone in US trading this afternoon. Now it is up to the US to deliver the goods, but as we head to the weekend the signs there are encouraging too."
US President Joe Biden accelerated his push to win Congressional approval of his USD1.9 trillion pandemic relief package after it cleared a key Senate hurdle.
Senate Democrats in the wee hours of Friday overcame a procedural hurdle and set the stage for a party-line enactment of Biden's relief bill, which includes a host of measures to help the economy recover, including more aid to small businesses and the unemployed.
But in a sign of just how narrow a path it must walk to passage, Vice President Kamala Harris cast the tie-breaking vote to overcome the objection of Republicans, who have said the proposal is too expensive as the country deals with a large budget deficit.
The euro stood at USD1.2025 at the European equities close, up from USD1.1976 late Thursday. Against the yen, the dollar was trading at JPY105.45, versus JPY105.44 late Thursday.
The highlights for the international economic calendar next week is German industrial production on Monday at 0700 GMT, and China's imports and exports on Tuesday overnight followed by German imports and exports at 0700 GMT.
On Wednesday, there is a Chinese consumer and producer price index print at 0130 GMT, with German and US consumer and producer price index reading at 0700 GMT and 1330 GMT, respectively.
On Friday, there is a UK trade balance and GDP print at 0700 GMT, with eurozone industrial production at 1000 GMT. It is also worth noting markets in China will be closed on Thursday and Friday for Lunar New Year celebrations.
The UK corporate calendar on Monday has full-year results from property manager Inland Homes and trading statements from industrial and electronic products distributor Electrocomponents and consumer goods brand designer UP Global Sourcing Holdings.
By Paul McGowan; paulmcgowan@alliancenews.com
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